Global Market Update
• The 10-year U.S. treasury added 3 bps to 1.51% on Monday (11/29/21). U.S. treasury yields also recorded an increase of 1-4 bps along the curve.
• U.S. stocks market rebounded last night with Nasdaq Composite led as it rose 1.88%. S&P 500 followed with an increase of 1.32% and DJI gained 0.68%.
• The Fed’s chairman Jerome Powell yesterday stated that the U.S. inflation rate hike will be slower in 2022. Powell, however, indicated omicron variant as a threat and worsen the labour market.
• U.S. Dallas Fed manufacturing index slipped to a level of 11.8 in Nov-21, a 280 bps lower than the prior month’s at 14.6.
• Canada noted another surplus in its current account of CAD1.37bn throughout 3Q21, however this remained below the consensus of CAD4.8bn.
• At the same time, Canada’s PPI inched up to 1.3% MoM/16.7% YoY in Oct-21, higher than Sep-21 figure of 1.2% MoM/15.3% YoY. Main upward pressures posed by chemical fertilizers, non-ferrous metals and energy products.
• The preliminary reading for Germany’s CPI inflation rate projected a rise to 5.2% YoY in Nov-21, above the consensus’ reading of 5% YoY and ECB’s target at 2% YoY. This rate was the highest in more than 25 years driven by supply chain disruptions.
• Euro Area’s consumer confidence was down to -6.8 in Nov-21, below the Oct-21 rate at -4.8. This fall reflected the households’ concern on the introduction of future lockdowns resulting from arising Covid-19 cases and its new variant, particularly in Spain, Netherlands and Germany.
• Japan and South Korea reported a fall in its industrial production to -5.4% and - 0.80% MoM respectively in Sep-21. On the annual basis, Japan’s rate dropped to - 2.3% YoY, while South Korea’s decreased to -1.8% YoY significantly lower than the consensus projection.
Domestic Market Update
• The 10-year Indo GB inched higher to 6.08% on Monday (11/29/21), still aligned with our daily forecast of 6.00-6.10%.
• The value of IDR against USD closed to a level of IDR14,319/USD yesterday. Meanwhile, 5-year Indo CDS dropped to 85.22 bps.
• There was an outflows in Indo GB market throughout Nov-21. As of Nov 26, the foreign ownership of tradable Indo GB was recorded at IDR925tn or IDR24tn lower from the end of Oct-21 at IDR943tn.
• Meanwhile from the corporate side, the issuance of corporate bond during 11M21 was at IDR91tn higher than the same period last year of IDR74.9tn.
Market Projection
• We expect the domestic Indo GB market to experience a limited move with the 10- year Indo GB yield to move within range of 6.05-6.15% today.
• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0071, FR0078, FR0087, FR0091, FR0068, FR0080, FR0083, FR0092
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